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RooterMan

RooterMan, LLC
https://www.rooterman.com
1-434-995-5582
126 Garrett Street, Suite J, Charlottesville, VA 22902

Initial Investment Range

$45,075 to $82,475

Franchise Fee

$7,475

The franchise offered is for a "RooterMan" that features sewer and drain cleaning services which include the maintenance and cleaning of sewer pipes, emergency plumbing repairs and other related services and products.

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RooterMan April 28, 2025 FDD Risk Analysis

Free FDD Library AI Analysis Date: July 16, 2025

DISCLAIMER: Not Legal Advice - For Informational Purposes Only. Consult With Qualified Franchise Professionals.

1

Franchisor Stability Risks

Start Here
Total: 10
3
4
3

Disclosure of Franchisor's Financial Instability

High Risk

Explanation

The franchisor explicitly warns of its "Financial Condition" as a special risk. The financial statements for its parent and guarantor, Premium Service Brands, LLC, confirm this, showing a Members' Deficit (negative net worth) of over $5.8 million in 2024 and net losses in both 2023 and 2024. This financial weakness could call into question its ability to provide ongoing support and services to you, or even to remain in business.

Potential Mitigations

  • A franchise accountant must review the guarantor's complete audited financial statements, including all notes, to assess its financial stability.
  • Discuss the implications of the negative net worth and recurring losses with your financial advisor to evaluate the long-term risk to your investment.
  • Your attorney should investigate if any states require the franchisor to post a bond or escrow fees due to this financial condition.
Citations: Special Risks to Consider About This Franchise section, Item 21, Exhibit B

High Franchisee Turnover

High Risk

Explanation

The franchisor directly warns of a high "Turnover Rate." Item 20 data and financial statement notes confirm a significant number of unit closures. In 2024 alone, the system experienced a net decline of over 100 units, representing a churn rate of over 15%. Such high turnover is a critical warning sign that may indicate systemic issues, such as franchisee unprofitability, dissatisfaction, or a flawed business model, posing a substantial risk to your investment.

Potential Mitigations

  • It is critical to contact a significant number of the former franchisees listed in Exhibit F to understand why they left the system.
  • Your accountant should help you analyze the churn rate over the past three years from Item 20 to verify the trend.
  • Discuss the high turnover rate directly with the franchisor and ask for their specific explanation and remediation plans, with guidance from your business advisor.
Citations: Special Risks to Consider About This Franchise section, Item 20, Exhibit F, Exhibit B (Note 1)

Rapid System Growth

Low Risk

Explanation

This risk was not identified in the FDD package. Rapid expansion can strain a franchisor's resources, potentially leading to inadequate franchisee support in areas like training, marketing, and operations. It is important to assess whether a franchisor's support infrastructure is growing in tandem with its unit count to ensure quality assistance is maintained for all franchisees.

Potential Mitigations

  • In any franchise, a business advisor can help you evaluate the ratio of corporate support staff to franchisees to gauge support capacity.
  • Asking existing franchisees about the quality and timeliness of support they receive is a crucial step your attorney can help you prepare for.
  • Your accountant can review the franchisor's financial statements for signs of investment in support infrastructure versus just sales.
Citations: Item 20

New/Unproven Franchise System

Medium Risk

Explanation

The franchisor explicitly identifies its "Short Operating History" as a special risk. RooterMan, LLC was formed in late 2021 and acquired the assets of a predecessor in 2022. While the brand itself is older, the current ownership and management have a limited history operating this specific franchise system. This newness increases risks associated with unproven support systems, potential operational changes, and establishing a track record under the current leadership.

Potential Mitigations

  • With your business advisor, conduct extensive due diligence on the management team's prior experience in both franchising and the plumbing industry.
  • Contacting franchisees who have been with the system through the ownership transition can provide valuable insight into recent changes.
  • Your attorney might be able to negotiate more franchisee-favorable terms to offset the risks associated with a newer management structure.
Citations: Special Risks to Consider About This Franchise section, Item 1, Item 2

Possible Fad Business

Low Risk

Explanation

This specific risk was not identified. A franchise concept tied to a fleeting trend rather than a stable consumer need presents a significant long-term risk. Even if the trend fades, your contractual obligations, including royalty payments, will continue for the full term of the agreement. It's crucial to assess if the business has enduring market demand and the franchisor has plans for evolution beyond the current fad.

Potential Mitigations

  • A business advisor can help you conduct independent market research to assess the long-term sustainability of consumer demand for the service.
  • Reviewing the franchisor's plans for research and development in Item 11 can provide insight into their commitment to innovation.
  • Your financial advisor should help you model a worst-case scenario where initial trends do not continue.
Citations: Item 1

Inexperienced Management

Low Risk

Explanation

While the franchisor itself is relatively new under its current ownership structure, its key executives appear to have extensive experience in managing other franchise brands under the Premium Service Brands umbrella. For instance, the CEO, Paul Flick, has been CEO of the parent company since 2015. This experience may mitigate some risks associated with a new franchisor entity, though the specific Vice President for RooterMan has only been in that role since March 2023.

Potential Mitigations

  • A business advisor can help you research the track record and reputation of the parent company, Premium Service Brands, and its management.
  • Speaking with franchisees from other brands under the same parent company could offer insights into the management's operational style and support.
  • It is important to ask the Vice President of RooterMan specific questions about their plans and vision for this particular brand.
Citations: Item 2

Private Equity Ownership

Medium Risk

Explanation

The franchisor is part of the Premium Service Brands portfolio, whose parent, PSB Group, is ultimately controlled by AE Capital, LLC. While not explicitly stated to be a private equity firm, this structure can introduce risks associated with prioritizing investor returns over the long-term health of the system. This could potentially manifest as pressure for rapid growth, cost-cutting in franchisee support, or a focus on an eventual sale of the brand.

Potential Mitigations

  • Investigating the history and typical operating strategy of AE Capital, LLC with the help of your business advisor is a worthwhile step.
  • During discussions with existing franchisees, ask about any changes in support, fees, or system focus since the current ownership took over.
  • Your attorney should carefully review the franchisor's rights to sell or assign the franchise agreement and explain the potential implications for you.
Citations: Item 1

Non-Disclosure of Parent Company

Medium Risk

Explanation

The franchisor, RooterMan, LLC, does not provide its own financial statements. Instead, it provides the consolidated financial statements of its parent, Premium Service Brands, LLC (PSB), which guarantees its performance. This is a common practice, but it means your assessment of financial stability rests entirely on the health of the guarantor, PSB, rather than the specific franchise entity you are contracting with. PSB's financials show significant weakness.

Potential Mitigations

  • Your accountant must analyze the guarantor's financial statements in Exhibit B with extreme care, as this is your only view into the system's financial health.
  • An attorney should review the wording of the Guarantee of Performance in Exhibit B to ensure it is unconditional and legally sound.
  • Discuss with your financial advisor the risks of relying on a financially weak parent company to back the franchisor's obligations.
Citations: Item 1, Item 21, Exhibit B

Predecessor History Issues

Medium Risk

Explanation

The franchisor, RooterMan, LLC, acquired the assets of a predecessor, A Corp., in January 2022. The FDD provides the predecessor's name and last known address. However, historical data on the predecessor's performance, litigation, or franchisee turnover is not detailed, creating a potential gap in understanding the system's full history and any inherited issues. The high turnover in recent years may be related to this transition.

Potential Mitigations

  • It is advisable to ask long-tenured franchisees about their experiences under the predecessor and through the transition.
  • With the help of a business advisor, you could conduct public record searches for information or news related to the predecessor company, A Corp.
  • Your attorney can help you ask the franchisor for more context regarding the system's performance and franchisee relations prior to the acquisition.
Citations: Item 1, Item 3, Item 20

Pattern of Litigation

High Risk

Explanation

Item 3 discloses extensive and material litigation involving the franchisor's affiliates and parent, Premium Service Brands, LLC. Multiple franchisees have filed lawsuits alleging fraud, misrepresentation, and failure to provide services. Additionally, there are several governmental actions against the affiliates for violating franchise laws. While most cases involve an affiliate (360 Painting), one pending case directly involves RooterMan, where a former franchisee has filed counterclaims for fraudulent inducement. This pattern represents a significant risk.

Potential Mitigations

  • A thorough review of every litigation summary in Item 3 with your franchise attorney is absolutely essential.
  • Consider that the pattern of franchisee lawsuits and regulatory actions across the parent company's brands may indicate a systemic cultural or operational issue.
  • Your attorney can help you perform independent research on these cases to understand the allegations and outcomes in greater detail.
Citations: Item 3
2

Disclosure & Representation Risks

Total: 15
4
1
10

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

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3

Financial & Fee Risks

Total: 10
2
5
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

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4

Legal & Contract Risks

Total: 16
5
7
4

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

5

Territory & Competition Risks

Total: 5
2
3
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

6

Regulatory & Compliance Risks

Total: 10
5
3
2

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

7

Franchisor Support Risks

Total: 4
2
2
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

8

Operational Control Risks

Total: 12
2
6
4

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

9

Term & Exit Risks

Total: 18
7
8
3

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.

10

Miscellaneous Risks

Total: 1
0
1
0

Example Risk: Franchisee Financial Obligations

Blue Risk

Explanation

This risk involves the financial obligations that a franchisee must meet, including initial fees, ongoing royalties, and other required payments. Understanding these obligations is crucial for long-term success.

Potential Mitigations

  • Carefully review the Franchise Disclosure Document (FDD) and consult with a franchise attorney to fully understand all financial commitments before signing.
  • Conduct regular risk assessments
  • Implement monitoring and reporting systems

Unlock Full Risk Analysis

Purchase the complete risk review to see all 102 risks across all 10 categories.